"I like your analogy to a real estate agent buying his client's house. But, why would I sell my house to the agent at a price which I believe is far below fair value? And, to parallel the stock volumes valuation, it wouldn't be just me, but thousands of others sellers simultaneously. Sellers of Nextel stock want out."
First, there's no rush to the door by NXTL shareholders to sell.
Second, if the realtor decides/tells you what the fair market value is and doesn't tell you that he's the buyer then you don't know any different. That's what NASDAQ can do. In NXTL's case, volume has been light through most of the move down and, thus, subject to MM's accelerating the move down. Remember, they're the ones who are deciding the bid/ask. When there's lots of buyers and sellers, the MM's are limited to their usual 1/8's and teenies but in the instant case, I think that NASDAQ MM's have contributed to the speed of the decline. Clearly there have been sellers but I'll bet the MM's are on the short side pushing it down. Another point: NASDAQ stocks don't need upticks to sell short. What does that tell you about accelerating declines compared to the NYSE?
Arnie |
